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German constitutional challenge to UPCA: new background information

The German Constitutional Court (the “Court”) has stopped the ratification of the Agreement on a Unified Patent Court (the “UPCA”) during preliminary proceedings due to a constitutional challenge made by an unknown applicant. The challenge, which sought a preliminary injunction to halt the ratification, came shortly before the president issued his final approval. The Court has provided the first insight into the main arguments of the challenge as reported by the Kluwer Patent Blog.

According to the information revealed by the Court, the applicant raised four main arguments:

1. Lack of approval from two-thirds of both houses - The applicant asserts that the ratification of the UPCA requires a two-thirds majority in both houses under Art. 23 Par. 1 and Art. 79 Par. 2 of German Basic Law because ratifying the UPCA means transferring sovereign rights to the European Union. Considering the broad consensus in favour of the UPCA, should the Court agree with the applicant on this issue, it is possible to secure the required two-thirds approval from both houses.

2. Illegitimate transfer of sovereign rights - The applicant further claims that ratifying the UPCA results in an illegitimate transfer of sovereign rights from Germany to the EU. He asserts a violation of Art. 38 Par. 1 sent. 1 of German Basic Law; the Court allows any person entitled to vote in federal elections to claim his voting rights were jeopardized by unconstitutionally taking away rights from parliament.

The requirements for what constitutes a violation of the principle of democracy are very strict. Ratification laws for international treaties and the related national transformation legislation have to observe the principal of conferral. In a nutshell, this principle means that neither the EU nor related international organisations may extend the competencies transferred to them.

3. UPC judges lack democratic legitimacy - According to the applicant, UPC judges are not democratically legitimated or independent and the administrative bodies of the UPC lack authority to issue legally binding administrative rules. Similar criticism was raised in the past regarding the European Patent Organization (EPO) and its judges on the board of appeals – in fact this is being addressed in four different cases currently pending before the Court.

4. Violation of the principle of loyalty towards EU law - Finally, the applicant claims ratifying the UPCA violates the principle of loyalty towards EU law since the treaty was not compatible with EU law. However, the Court has already decided that applicants are not entitled to claim the violation of EU law as violation of the German Basic Law. Violations of EU law are in the exclusive jurisdiction of European courts, therefore it is highly unlikely that the Court will address this argument.

Outlook: Limited chances of success but further delay

The applicant’s arguments are not surprising. The argument that the judges lack independence is familiar from the cases challenging EPO decisions. As to the alleged violation of EU law, it is most likely that the Court will simply declare it has no jurisdiction in this matter.

It is highly unlikely that the Court will consult the Court of the European Union within preliminary proceedings. Instead, the Court will likely issue a decision based on an impact analysis and a summary examination of the applicant's legal arguments.

However, the Court has still not announced a specific date for the decision. Delay by the Court in issuing its decision, will result in further delay in ratifying the UPCA. The UPCA has been ratified by 13 partaking states and preliminary application has been approved by the UK. Thus, Germany remains the only country yet to ratify.

Compare jurisdictions:Litigation: Enforcement of Foreign Judgments

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